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Showing posts from May, 2020

Decision for buying a house

This topic is very close to my heart as it has paved the way for my financial literacy. Also, house is a basic necessity of life and everybody has a need for it. For most, it is the biggest purchase of their life. There are 2 aspects in this decision - Financial and Emotional. Emotional - A house where a family plans to live creates wonderful memories during its life span. Memories of your kids and watching them grow everyday and eventually flying out of the bird's nest. Also, you can design your home as per your aesthetics and beliefs which are not possible in a rented apartment. Financial - Below is the list of Financial aspects while buying / selling a house 1. Purchase Price compared to Affordability (Recommended - 2-3x of your annual salary max) 2. Interest Rates - At what interest rate do you plan to take a mortgage loan. At 10% interest rate, you would end up paying double the purchase amount to the bank in 10 years 3. Liquidity - House is an illiquid asset or a